Deckers (DECK) vs Nike (NKE): Same DCF, Opposite Verdicts

A note on authorship: The research, analysis, and opinions in this article are the author's own. Claude (Anthropic's AI) assisted with drafting and editing the prose.

Every number below is mechanical output — the KashVector DCF tool's free cash flow, discount rate, and growth inputs run through a fixed formula, not an opinion on either company's brand, products, management, or competitive position. This is a companion to the Nike case study: same tool, same formula, and a second footwear company — Deckers Outdoor, whose brands include HOKA running shoes and UGG boots — that lands on the other side of the verdict. All figures are as of 25 September 2026, at prices of $35.99 (NKE) and $78.68 (DECK). The Nike case study ran on 12 September inputs, so NKE's figures here differ from that article — the price and the tool's discount rate have both moved since. One short passage in the revenue section gives the general analyst consensus on why the revenue numbers moved; it is labelled as context, and the model neither uses nor confirms it. This is not a recommendation on either stock.

What the tool says on autopilot

Both companies carry the same sector label on Yahoo Finance, so the tool treats both as plain-DCF companies — no bank, REIT, utility, or airline special case. Both use a 5-year projection, a 2.5% terminal growth rate, and the same risk-free rate (5.16%) and equity risk premium (4.42%). The one difference in method comes from the growth input itself: when a company's own growth input is negative, the tool uses a fading-growth version of the DCF that eases the decline toward the terminal rate instead of holding it flat for five years; otherwise it runs a plain 5-year DCF. That is why Nike runs the first and Deckers the second.

Nike (NKE) — price $35.99, fading-growth DCF:

Deckers (DECK) — price $78.68, plain DCF:

Neither company is a knife-edge: Nike lands Overvalued in all three scenarios and Deckers Undervalued in all three. The gap between the two Base-case margins of safety is 138 percentage points (-56.8% vs +81.2%). Two things in each company's own numbers point in opposite directions: the revenue trend, and the balance sheet.

Revenue: Deckers growing, Nike shrinking

The tool doesn't ask for a growth rate; it derives one from each company's own reported history, using the slowest of its growth measures across the fiscal years Yahoo Finance reports (here FY2023–FY2026), and then limits the result to between -5% and +15%. Here is the trend behind each company's number:

Deckers grew revenue in every one of those years (+18.2%, +16.3%, +9.8%), and its free cash flow rose from $0.46B to $1.10B. Its slowest growth measure is revenue at +14.7% a year, which sits inside the limits, so that becomes its Base growth input. Year by year that growth has been slowing, and the tool uses the three-year average rather than the latest year.

Nike is the opposite. Revenue dropped 9.8% in FY2025 and has been roughly flat since (+0.2% in FY2026), but free cash flow fell in each of the last two years — -51% in FY2025 and -33% in FY2026 — from a $6.62B peak in FY2024 to $2.18B, with the trailing twelve months lower again at $1.89B. Nike's slowest growth measure is its free cash flow at -23.5% a year, but the tool never lets the growth input fall below -5%, so Nike's Base case uses -5.0%. Bear and Bull sit half that rate either side (-7.5% and -2.5%); for Deckers they are +7.3% and +22.0%.

The story behind the numbers (context, not a model input). The model only sees the figures, not the reason for them. The general analyst consensus is that Nike moved away from third-party retailers toward selling through its own stores and website, and that the shelf space it left behind was taken by other brands, Deckers (HOKA, UGG) among them. The DCF neither uses that view nor can confirm it, and it says nothing about what happens next — it simply turns the reported numbers into a valuation.

One caution runs the same way for both: each company's trailing-twelve-month cash flow, the base the model projects from, is below its last full fiscal year — Nike $1.89B vs $2.18B, Deckers $0.87B vs $1.10B.

Balance sheet: Nike carries debt, Deckers holds cash

A DCF values the whole business first, then adjusts for the balance sheet to get the value that belongs to shareholders: debt is subtracted, cash is added.

Nike holds $9.03B of cash against $11.04B of debt, leaving $2.02B of net debt — about $1.36 off every share's value, or 3.8% of the price. Deckers holds $1.60B of cash against just $0.47B of debt, leaving $1.13B of net cash — about $7.75 added to every share, or 9.9% of the price.

Debt also changes the discount rate. It makes up 17% of Nike's capital and 4% of Deckers', and because debt is cheaper than equity, that pulls Nike's Base discount rate down to 8.98% against 9.99% for Deckers. That works in Nike's favour, so it isn't what holds Nike's value down. Separately from the balance sheet, Nike's share price is about 28 times its free cash flow per share ($1.28); Deckers' is about 13 times ($5.98).

What this doesn't say

The valuation figures above are not a view on which company is better run, which brand is stronger, or where either share price goes next; the one passage of context in the revenue section reflects general analyst commentary and is not part of the calculation. The model is backward-looking: it extends each company's recent trend and applies the same discount-rate arithmetic to both. Whether Nike's cash flow recovers or Deckers' growth continues is exactly what a DCF cannot tell you — which is why the tool lets you change the assumptions yourself. One pair of stocks on one date also says nothing about how the tool performs in general.

For the mechanics behind every number above — how free cash flow is derived, how the discount rate is built, and when the model switches to a fading-growth projection — see the companion explainer, Nike's own case study, and each company's live ticker page for current price and trend charts:

• How to Value a Stock: DCF and the Dividend Discount Model →
• Nike (NKE) Valuation Case Study → — how far growth and cash-flow recovery would have to go
• Nike (NKE) full ticker page →
• Deckers (DECK) full ticker page →